ACTIVITY 1

1. Discuss the differences and similarities between the roles of accountants

and auditors. What additional expertise must an auditor possess beyond
that of an accountant? (7 marks)
Accounting and auditing are two professions that rely on the same pool of
expertise and, for the most part, need similar knowledge and skill sets.
Accountants and auditors deal with a company's financial statements to ensure
that they are current, accurate, and compliant with various regulatory standards.
However, subtle differences between the roles of these two exist. An accountant
is a regular employee of the company and seeks after long-term employment. He
has to keep his possess office within the building of the company who hired him.
It is the accountant’s obligation to record, classify, and summarize economic
events in a logical manner for the purpose of providing financial information for
decision making. An accountant must have a strong and solid understanding of
the concepts and procedures that serve as the foundation for creating accounting
data in order to deliver pertinent information. Meanwhile, an auditor may have
been employed on a short-term or project basis to validate or corroborate the
accountant's work. He must ascertain whether the accountants' recorded data
accurately reflects the economic events that transpired during the accounting
period. Having mastery in the accumulation and evaluation of audit evidence,
determining the proper audit procedures, deciding the number and types of items
to test, and evaluating the results are the expertise sets that recognizes an
auditor from an accountant.
2. Discuss the similarities and differences between financial statement audits,
operational audits and compliance audits. Give an example of each type. (8
marks)
Financial statement audits, operational audits, and compliance audits are
similar in that they all include accumulating and evaluating evidence concerning
data to determine and report on the degree of correspondence between the
information and established criteria. Although all audits entail a review of
supporting documentation, each type of audit serves a distinct purpose.
Financial statement audits evaluate if a company's financial statements have
been prepared and presented properly, fairly and in conformity with recognized
financial accounting standards. For example, the annual audit of DOH, in which
COA examined DOH’s financial statements to determine the truth and fairness of
the department’s financial statements. Operational audits examine the
efficiency and effectiveness of operating policies and procedures. For example,
an internal auditor of a manufacturing company examines employee time records
and personnel records to determine if sufficient information is available to maximize
the effective use of personnel. Compliance audits examine whether the company
has followed and complied with policies and regulations set forth by contractual
 agreements, regulatory bodies, company management, or other high-ranking
officials.  For example, if a company is listed on a stock exchange outside the country
in which it operates, they must ensure that the company conforms with the stock
exchange's requirements and the compliance auditor should additionally assess
these areas to see if the associated entity's present practices comply with the
requirements.

ACTIVITY 2
1. One of the most talked issues recently is the denial of ABS-CBN Corp.
franchise by the Congress. It is of public knowledge that SGV & Co. is the
auditing firm who certified ABS-CBN’s financials. Can they be held
accountable in terms of its failure to consider the going concern issue of
the company when the circumstance of expiration of ABS-CBN’s franchise
was expected to happen in May 2020 and there was a possibility of the risk
of nonrenewal? What about the alleged creative accounting done by the
management to further its interests? (500 words)